Chinese man pleads guilty to $100m piracy scam

A Chinese businessman has pleaded guilty to copyright infringement on an epic scale after helping to crack and sell pirated high-end software worth in excess of $US100m over a three year period.

Xiang Li of Chengdu in China’s south-western Sichuan province, disputed the value of the software he sold but pleaded guilty to conspiracy to commit criminal copyright violations and wire fraud, according to Reuters.

The indictment (PDF from Wired) claims that Li and co-defendant Chun Yan Li sold cheap pirated copies of business software through web sites such as “crack99.com” and “cad100.net”.

Between 2008 and 2011 they would scour darknets for software and disable access controls by cracking license files, before selling the results to over 300 purchasers in the US and over 60 other countries.

The duo advertised over 2,000 separate software products for sale, including some from Microsoft, Oracle and SAP. All manner of vertical applications were catered to, including water management, explosive simulation, manufacturing and space exploration.

The pair’s business acumen does appear to be a little off, however, as they generated profits of only around $60,000 despite selling software worth $100m.

For example, the indictment reveals how undercover agents were sold "Satellite Tool Kit 9.2.1” from Analytic Graphics for just $2,000, despite the product retailing for over $240,000.

US authorities feel buyers should have known better: NASA engineer Cosburn Wedderburn still awaits sentencing after pleaded guilty last year to buying programs from the pair worth over $1m.

The case is not only notable for the large sums of money involved, but also the way the two were apprehended. For apparently the first time, US investigators managed to lure Chinese piracy suspects off their home soil and onto US territory – in this case the Pacific island of Saipan, near Guam. ®